Character AI, a startup that allows users to create AI avatars of themselves, has announced a partnership with Google. In a blog post, Character AI revealed that it will license its large language model (LLM) technology to Google in exchange for increased funding. As part of the deal, Character AI’s founders, Noam Shazeer and Daniel De Freitas, along with some members of its research team, will join Google. While most of Character AI’s employees will remain with the company, its general counsel, Dominic Perella, will become interim CEO.
Character AI’s technology has gained significant attention since its founding in 2022. In March 2023, the company reached a valuation of $1 billion after a $150 million funding round led by Andreessen Horowitz. Previously, Character AI developed its own models for creating AI avatars, taking a full stack approach of pre-training, training, and deployment. However, the company noted in its blog post that the landscape has changed, with more off-the-shelf, pre-trained models readily available. By leveraging Google’s LLMs, Character AI can now focus on post-training models and developing new products for its users.
Interestingly, Meta recently discontinued its celebrity AI chatbots, which were seen as rivals to Character AI. This move suggests that Character AI may have an advantage in the market. Google has also confirmed that Noam Shazeer will join the DeepMind team, expressing excitement about returning to Google and the future success of Character AI.
While the details of the partnership between Google and Character AI remain undisclosed, it is not believed to be an acquisition. In recent years, big tech companies have utilized “acquihiring,” whereby they hire the executive team and a significant portion of a startup to avoid regulatory concerns. Microsoft, for example, hired the co-founders of AI startup Inflection through acquihiring. Character AI has also been involved in potential takeover talks, with Elon Musk’s AI startup xAI reportedly considering a purchase. However, Musk later denied these reports.
Overall, the partnership between Character AI and Google represents an exciting development in the AI industry. By joining forces, these two companies have the potential to further advance AI avatar technology and offer innovative products to users around the world. With the increasing availability of pre-trained models and the focus on post-training capabilities, Character AI is well-positioned for continued success in the future.